Transport Committee on April 25th, 2022

[Bruce Rodgers]

In 2015 the government approved the new examination facility out of Vancouver. It was originally only one. They approved the second one at Tsawwassen. That went in, with the premise that it would have large-scale imaging and that it could X-ray the containers to facilitate the examination process. That has been tied up as well. We have put in a request for access to information to try to determine the reason for the delay. Again, it's been two years now, and we don't have a response from our initial inquiry on that one either.

That would facilitate a quicker examination process through that facility. Right now it's very labour intensive and, because of that, it's adding delays and additional costs to have the examinations performed.

Additional technology would be welcome.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Rodgers.

Thank you, Ms. Gladu.

Next we have Mr. Chahal.

Mr. Chahal, you have six minutes. The floor is yours.

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you, Chair.

Thank you to all of our witnesses today for providing testimony on this important study.

I want to get a little bit into how the most recent lockdowns we've seen in China have affected our supply chain. I'd like Ms. Kuzeljevich to provide any insights on that and the impact on the shippers.

[Julia Kuzeljevich]

What we have seen coming across our desk at the association over the past two years of COVID is that, with the COVID-zero policy in China, what they require is quarantining and locking down entire ports, for example, even with a few cases, so you have several things creating a domino effect in the supply chain.

You have a port shutdown and a lack of employees to service the outgoing ships, so the ocean carriers have to re-create a schedule and, as a result, they will take capacity out of the system. They will start avoiding certain ports or, depending on where they consider a priority, they will stop calling at various ports. “Cancelling sailings” is the term.

Then you end up with situations where you have chartered ghost ships that are appearing with no berth available at ports, or you have delays in the transit adding more time to the transit time and the expected arrival of the ship. It creates a domino effect down the chain with regard to the inland delivery of the goods and the availability of staff to off-load the ships.

[George Chahal, Liberal, Calgary Skyview, AB]

What can be done to mitigate these impacts? You've talked about so many. How we can source from other countries better?

You also mentioned a supply chain still in trouble today. Could you just elaborate more on that?

[Julia Kuzeljevich]

Well, we've witnessed a compounding effect. Even before COVID, we were in trouble. For example, weather-related delays occur every year and we expect those. Low temperatures in the winter require slower trains across the Prairies.

To a large degree, a lot of those things are expected. We deal with them and there are workarounds. However, it was just a compounding effect, starting with blockades, then COVID, and then all of the resulting domino effects from the lack of staff and capacity taken out of the system on the air side as an example. As well, you were dealing with the phenomenon of consumers purchasing online, because they couldn't travel, and you had an influx of volumes. Although those are probably temporary issues, it really strains the supply chain. When you have a blockade, when you have a strike, when you have a weather delay, it does not take long for whatever resilience we have to be beaten out of the supply chain. Those became acute issues that we were able to observe over the last two years.

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you.

I'm going to move over to the Western Canadian Shippers' Coalition and Mr. Montpetit.

In your opening remarks you talked specifically about a “comprehensive supply chain review”. Could you provide some insights on what you'd like to see within that review and where that review would be focused?

[David Montpetit]

Absolutely. Thanks. That's a good question, because we've been pushing for this for several years now.

As we had suggested and continue to suggest, the focus would be looking at all modes, specifically rail and port trucking, and taking a whole holistic view of the supply chain itself, looking for opportunities, looking for inefficiencies and looking for bottlenecks. Most likely you would have to bring in third parties to do that, in combination with information that would probably be provided by the railways, shippers and provinces, be it road, short-lines, and so on. It would basically be a holistic review of the supply chain, because I don't believe we've ever done one. If we have done one, it has been years, maybe 40 years ago. I don't remember exactly, but it has been a long time.

To all the points here, a combination of them, even the comments that Mr. Brazeau made, and so on, the supply chain has been beaten up. The railways have been beaten up. Shippers have been beaten up. We've been just hammered with weather events, blockades, and so on. I've never seen anything like it in all the time I've been doing this.

My question for government is: What can you do, and what visibility and what funding can we transfer into an overall review? Before we spend infrastructure dollars, we need to know where we spend them. There have been some good dollars spent already. I believe Ms. Hardy made a comment—correct me if I'm wrong—about how long infrastructure projects take to actually have legs. This is going to take a long time, but in order to spend the money and spend it wisely, we need to understand first where we're spending the money and why.

Thank you for the question.

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you.

You mentioned bottlenecks specifically in the Lower Mainland and northern Alberta. What were you referring to in northern Alberta?

[David Montpetit]

It's just the infrastructure that's actually up there. There are speed limits coming out of the Fort McMurray area and there's a lot of congestion and traffic there. My members are continually struggling out there for service. They're also struggling to get additional warehouse space when required. It has been, and continues to be, one of the major bottlenecks that my members face.

[George Chahal, Liberal, Calgary Skyview, AB]

So the highway—

[David Montpetit]

That's a separate conversation.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Chahal.

Thank you very much, Mr. Montpetit.

Mr. Barsalou‑Duval, you have six minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Mr. Chair.

Mr. Labbé, given what we've seen recently in the news about French at CN, you won't be surprised by me asking some questions about that.

Your company chose not to include a single francophone on the board of directors. Do you think that this choice is normal?

Don't you agree with me that this is a bit of a slap in the face for all Quebeckers?

[Sébastien Labbé]

At CN, we are aware of the situation.

Mr. Sean Finn, our executive vice-president, has said that the situation will be resolved over the next year, after the departure of two directors in the coming months.

This situation occurred after Mr. Charest left the board of directors.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

You say that the situation will be resolved, but according to the briefing note, there were three vacant positions and it was proposed that they be filled by three people who do not speak French. Therefore, your company made a deliberate choice, in spite of the warning from the government of Quebec, which asked that the next CEO understand French and Quebec. It seems that this went unheeded.

Do you think that, in the entire company's executive level, having a single person who knows Quebec and speaks French is enough?

[Sébastien Labbé]

In fact, there is more than one in senior management.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

I am talking about the board of directors.

[Sébastien Labbé]

As Mr. Finn said, the situation will be resolved in the coming months.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

I noticed that you spoke entirely in English during your opening remarks.

Recently, we read a letter from the Teamsters union, which mentioned a certain climate of fear among those who work in French in the company and are unilingual. They fear reprisals and being left on the sidelines if they do not speak English. There are managers who do not speak French in the company, which makes it impossible for unilingual French speakers to work with them.

Would you say that, at CN, the corporate culture is hostile to French?

[Sébastien Labbé]

I've been working at CN for 24 years and I'm from Beauce, Quebec. I have always been able to communicate in French or English at CN. Since I currently work in Alberta, I speak English more often.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Do you think that, at CN, a person who is a unilingual francophone would have the same opportunities to climb the ladder or get a position as a person who is a unilingual anglophone?

[Sébastien Labbé]

I have no way of knowing. It always depends on the person's skills. We are in a competitive global market and must take into account communications with clients, for example those in the United States.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Since you've been in this position, have you noticed an improvement or deterioration in the presence of French in the company?

[Sébastien Labbé]

Personally, I haven't noticed any change since I started working 24 years ago. There are communications in English and in French. There are also meetings held in French, depending on who participates in them.